Russia, Ukraine and the European Union are the main pressure countries, and their economic and policy expectations are disturbed. In the short term, the US sanctions against Russia mainly target Russian political officials, energy departments and banks, and will freeze Russian assets in the United States. The market's Preventive Psychology of strengthening sanctions may be more cautious about Russian orders in the future. Overall, it will have a great impact on the stability of the European financial and energy system. With the rapid advancement of Russia's military, after controlling Ukraine, NATO and ASEAN countries face threats, while Russia's bargaining chips increase, and the scope of US sanctions may be blocked. The military operation is expected to end quickly, but remain cautious about the easing of the situation.
The EU's Strategic Autonomy is facing a prisoner's dilemma. Under the pressure of economy and inflation, the process of raising interest rates is blocked. On the one hand, if the "lifeblood" of natural gas and crude oil is in Russia's hands and takes a radical attitude towards Russia, European inflation expectations will be "difficult to ride a tiger", sanctions will be imposed on Russia's swift settlement system, and the financial damage will also be paid by itself. On the other hand, the EU is still subject to the United States politically and militarily. Under the influence of the Ukrainian incident, the probability of stagflation increased, and the European Central Bank may delay its exit from the stimulus plan. The speed of EU repair has been weakened, and the process of EU interest rate hike may be forced to slow down.
The US monetary power is still facing challenges. Under the pressure of inflation, the demand for interest rate increase has increased, but the decline of stock index has also brought constraints to the policy. It is expected that US sanctions will bypass some trade varieties that exacerbate inflation. Under the influence of fluctuations in equity market sentiment and high inflation, the process of interest rate hike by the Federal Reserve will also be disturbed.
The impact on China's economy is limited, the industrial chain is likely to remain stable, and CPI inflation is moderate. China's steady growth policy remains unchanged, and infrastructure investment will continue to grow steadily. China's energy and aluminum are highly dependent on Russia's imports, but the bilateral relations remain moderate and are expected to have a limited impact on China's trade. The policy of ensuring supply and price stability of coal will continue, the prices of overseas crude oil and some commodities will rise or be transmitted to China, the downward speed of PPI inflation may slow down, the middle and downstream processing enterprises will be under phased pressure, and the CPI will remain moderate in the first half of the year.
China's stock market will still return to fundamentals and the space for monetary policy will increase. It is expected that after the extreme time point of the conflict, the stock market will gradually return to fundamentals. U.S. bond yields gradually fell after the conflict. The rate hike in March is facing a game between inflation and stabilizing stock market confidence. If the rate is less than the 50bp previously expected by the market, it will make room for China's monetary policy. The RMB remains strong, and the exchange rate stabilizer is expected to play a role in the future, which also brings more confidence to the bond market.
Energy costs may remain high, and Shenzhen Agricultural Products Group Co.Ltd(000061) prices are also under upward pressure. In addition to the impact of the event, as more countries open their doors, the demand for travel fuel consumption increases, but the willingness of OPEC on the supply side to increase production is not strong, and the supply and demand of crude oil fundamentals are tight. Russia and Ukraine are also major agricultural exporters. This year is also the second year of La Nina effect, and Shenzhen Agricultural Products Group Co.Ltd(000061) prices will also be under pressure. Russia is also a major exporter of fertilizer, aluminum, nickel, palladium and platinum, and the fluctuation of bulk commodities is expected to increase this year.
